When an auto insurance company paid an insured under UM / UIM, how do they recover the payout?

Asked about 2 years ago - Hayward, CA

When an auto insurance company paid an insured under UM / UIM, can they recover from the under insured person or the other insurance company or both?

Attorney answers (3)

  1. Howard Robert Roitman

    Contributor Level 17

    3

    Lawyers agree

    Answered . Indemnity insurer's subrogation rights
    With insurance subrogation, there are three parties involved: the insured; the insurer; and the tortfeasor (the party who is responsible for the damages). Under subrogation, the insurance company assumes the right to sue the tortfeasor for the amount of the damages reimbursed to the insured.[3] An indemnity insurer has two distinct types of subrogation rights. Firstly, they have the classic type of subrogation used in the example above; viz. the insurer is entitled to take over the remedies of the insured against another party in order to recover the sums paid out by the insurer to the insured and by which the insured would otherwise be overcompensated.[4] Secondly, the insurer is entitled to recover from the insured up to the amount which the insurer has paid to the insured and by which the insured is overcompensated.[5] The latter situation might arise if, for example, an insured claimed in full under the policy, but then started proceedings anyhow against the tortfeasor, and recovered substantial damages

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  2. Michael A Rabban

    Contributor Level 9

    2

    Lawyers agree

    Answered . Subrogation

  3. John Gus Zgourides

    Contributor Level 17

    2

    Lawyers agree

    Answered . Yes, usually by subrogation (standing in the shoes of another). They can seek recovery from the responsible parties on the UM insured's behalf because they already paid you. The law varies by state and by also by the respective insurance policies' terms.

    My responses to questions on Avvo are never intended as legal advice and must not be relied upon as legal advice.... more

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